THE PETER SCHIFF BLOG : An Unofficial Tracking of Peter Schiff and The Libertarian Austrian School of Economics

PETER SCHIFF

Thursday, October 3, 2013

Peter Schiff: Fed Admits Economy is Fundamentally Weak

All the buildup. The hype. You would be forgiven if you thought this was
some sort of Hollywood blockbuster coming down the pipe. It fizzled,
just like so many of them do. Ask a room full of economists on Tuesday
if they thought the QE taper was on, and you would have heard a
resounding yes. It was a question of just how much.Then came Wednesday and the shocker that the Federal Reserve was leaving QE unchanged and slashing growth forecasts. Peter
Schiff is out with a letter explaining his thoughts on the whole
process, and what he sees as a way forward. He thinks the Fed admitted
that the US economy is fundamentally weak, and cannot handle the
stimulus being withdrawn. The recovery is highly dependent on the QE
program like an addict. Plus, the benefits all go to Wall Street. Dow
15k, yet all we produce are part-time jobs? Sustainability baby.

Schiff
goes on to say that when the stimulus has to be removed, the correction
to real values will be worse than the one five years ago. Obviously
Peter Schiff left his rose colored glasses at home.

With QE,
the Fed has succeeded in one thing. Confidence. With the stock market
back at lofty levels, investors are feeling confident. Real estate
prices are being bid up by funds looking to get into the rental game.
Perception on the Wall Street is all is well. Except on Main Street, no
one buys into that anymore. Without QE, there is no way the markets
reach these levels. So remove the drug, and watch the inevitable crash
according to Schiff.

As we can already see today, the Fed has
one exit strategy. It will sound familiar to most Americans. Hope. Yeah,
they are pinning the whole thing on hope. Sure, they will drop their
hints on slowing down this, tapering that.

In the end, the Fed
needs the economy to all of the sudden come back to life. The problem
is, once it does and they stop the QE, they themselves become the
problem with the tightening financial conditions. Interest rates rose
over the summer due to the taper talk. Now, they have to hope one day
the economy is strong enough to absorb their shock.

Some would
argue we have where the political refrain of hope has led this country.
Now we have a central bank following the same premise.

Peter
Schiff is an investment broker, author and CEO of Euro Pacific Capital
Inc. Schiff is known for his bearish views on the US economy and US
dollar, and his bullish views on commodities, foreign stocks and foreign
currencies

Peter Schiff is a well-known commentator appearing regularly on CNBC, TechTicker and FoxNews. He is often referred to as "Doctor Doom" because of his bearish outlook on the economy and the U.S. Dollar in particular. Peter was one of the first from within the professional investment field to call the housing market a bubble. Peter has written a book called "Crash Proof" and a follow-on called "The Little Book of Bull Moves in Bear Markets". He is the President of EuroPacific Capital, which is a brokerage specializing in finding dividend-yielding, value-based foreign stocks.

Peter Schiff is a well-known commentator appearing regularly on CNBC, TechTicker and FoxNews. He is often referred to as "Doctor Doom" because of his bearish outlook on the economy and the U.S. Dollar in particular. Peter was one of the first from within the professional investment field to call the housing market a bubble. Peter has written a book called "Crash Proof" and a follow-on called "The Little Book of Bull Moves in Bear Markets". He is the President of EuroPacific Capital, which is a brokerage specializing in finding dividend-yielding, value-based foreign stocks.